TLDR
US stock futures dropped sharply on Friday with Nasdaq futures down 1.5% as investors lose confidence in a December Fed rate cut
Bitcoin fell below $96,000 for the first time in over six months, down more than 20% from its October peak
Odds of a December quarter-point rate cut have dropped to below 50%, down from 95% probability just one month ago
Tech stocks led losses with Tesla falling 4% premarket to below $400 and Nvidia down 3% after Thursday’s steep declines
Fed officials including Minneapolis Fed President Neel Kashkari cite economic resilience and inflation concerns as reasons to pause rate cuts
US stock futures fell sharply on Friday morning, preparing to add to Wall Street’s steepest sell-off in over a month. Dow Jones Industrial Average futures dropped 0.6%, while S&P 500 futures fell close to 1%.
Nasdaq 100 futures tumbled around 1.5%. The losses follow Thursday’s bruising session that saw major indexes log their steepest one-day declines in over a month.
Technology stocks are leading the decline. Tesla shares fell 4% in premarket trading to break below $400, following its worst day since July.
Nvidia shares moved 3% lower after tanking on Thursday. AI concerns are driving an exodus to less hotly valued sectors.
Bitcoin also continued its slide, falling below $96,000 for the first time in over six months. The cryptocurrency has sunk over 20% since its October peak.
Shifting Fed Policy Expectations
The market’s mood has turned gloomy as worries grow that the Federal Reserve will slow its pace of policy easing. Fed officials have taken an increasingly hawkish tone.
Traders now see less than 50% odds of a quarter-point rate cut next month. This represents a sharp drop from about 95% probability just one month ago.
Minneapolis Fed President Neel Kashkari became the latest official to lose appetite for rate cuts. He flagged “resilience” in the US economy and continued concerns over inflation.
Policymakers lack clear insight into price pressures and the jobs market. This follows the record six-week federal shutdown.
Questions remain about what data will be released and in what form. The government has only recently reopened.
President Trump is preparing to make substantial cuts to tariffs to bring down high food costs. Food prices have been a concern for voters in recent state and local elections.
Several trade deals with Argentina, Brazil and other Latin American countries aim to make items like bananas and coffee more affordable. Global equity markets are reflecting the tech-led pressure.
Hong Kong’s Hang Seng and Japan’s Nikkei dropped nearly 2% each. London’s FTSE fell 1%.
UK GDP growth slowed to 0.1% in Q3. UK unemployment ticked up to its highest level since early 2021.
Oil prices rebounded slightly on renewed geopolitical risks. Energy stocks continue to struggle under the broader risk-off mood and worries about oversupply.
